Multinational Tax Base Erosion Problem of the Digital Economy
- 1 School of Economics, Jinan University, Guangzhou, China
Abstract
Recently, Amazon and Google and other large multinational companies are reported that they use changing corporate structure to avoid tax. This behavior caused widespread international concern. Many multinational companies use digital economy transactions, and take advantage of international tax loophole to erode basic tax. This emerging trading pattern is a huge challenge to national tax authorities. Thus, researching the tax mechanism of Transnational Corporations in the digital economy, a better understanding of the behavior of multinational tax avoidance is important to our country. This paper analyses the digital economy trade transaction characteristics, and points out the cause of the tax erosion in the area of digital economy; then combines with characteristics of the tax system China, discusses on measures taken by China to deal with the tax avoidance in the digital economy.
- Leng, C.Q. (2012) The Research on the Application of the Permanent Establishment Rule to Electronic Commerce. Shanghai Jiao Tong University, Shanghai.
- Owens, J. (2014) After BEPS Era and the Impact on China. International Tax.
- Liang, Y.C. and Liu, X.J. (2009) Review of the Capital Weakening Tax System. International Taxation.
- Wu, Z.X., Zhao, L. and Huang, D. (2014) An Anti-Avoidance Research on Transfer Pricing of Cross-Border Transaction of Intangibles. International Tax.
- Liao, Y.X. (2010) Case from Glaxo Marketing of Intangible Transfer Pricing Regulation Issues. Lawyer.
- Guo, X.J., Zhang, B. and Gao, L.Q. (2015) Challenges and Strategies for International Taxation in the Digital Economy. International Tax.
- OECD (1998) Electronic Commerce: Taxation Framework Conditions. OECD, Paris, Oct. Framework Conditions c, 5-8.
- OECD/G20 (2014) Base Erosion and Profit Shifting Project. Developing a Multilateral Instrument to Modify Bilateral Tax Treaties, Action 15: Deliverable.
- OECD (2013) Action Plan on Base Erosion and Profit Shifting. OECD Publishing. http://dx.doi.org/10.1787/9789264202719-en
- OECD (2015) Aligning Transfer Pricing Outcomes with Value Creation. OECD Publishing.
- Hongler, P. and Pistone, P. (2015) Blueprints for a New PE Nexus to Tax Business Income in the Era of the Digital Economy. WU International Taxation Research Paper Series.